The FLSmidth Canadian mines division is so wide spread that the downturn in the North American market hasn’t slowed its progress. The company strategy of synergizing business operations means it conducts business in more locations internationally, such as South America, Africa, Mongolia and Indonesia, where the mineral mining and cement industries are booming.
The Canadian Business Journal spoke with FLSmidth Canada Global Product Manager Jim Brownlee about the mining industry’s tendency to go big, and the challenges of going big for the engineering teams, as well as the company’s global strategy to synergize its international operations.
Go Big, But Not Alone
From its location in Orillia, Ont., the FLSmidth Canada’s main business is outfitting mine shafts and hoisting plants, which include the cages for workers to ride in, crushers, feeders, ore skips, and hoists. FLSmidth provides equipment customized to the size and scale of particular mines, and as the mines are getting larger, the equipment is making FLSmidth experts on building some the world’s largest hoists and mine shaft equipment.
In line with industry’s “go big” philosophy, one of company’s project involves building the largest hoisting cage in the world with the capacity to carry 300 miners for PT Freeport Indonesia that has ordered two of these massive cages.
“The big cage for PT Freeport is being installed in what’s called a sub-vertical shaft. The existing shaft is there, and it’s down several thousand feet. They move horizontally and sink another shaft to go deeper,” Brownlee says, emphasizing the challenge of the operation. “To get it to the underground hoist it has to be broken up into pieces and assembled underground. So we’re making this cage in 28 pieces to be transported underground and then it all has to fit together perfectly.”
Another massive undertaking is building a 65 ton skip for Rio Tinto’s Oyu Tolgoi Mine. FLSmidth is also currently working on the feasibility for a project requiring an 80 ton skip, which would be the largest ever produced.
These projects would have been difficult to achieve if not for the company’s strategy to synergize its global operations. Connected with FLSmidth office in Johannesburg, South Africa, the Canadian office has combined the strengths of both offices to form a single operation called Mines Shaft Systems. Together both offices now offer a number of services normally provided by five or six companies.
“This one source [approach] is the FLSmidth philosophy. So now at mine shafts as well as the other divisions of FLSmidth we can pretty much supply everything as far as milling and processing and materials handling on the surface,” he says. “We now can provide pretty much the entire mine as far as the hoist and shaft equipment.”
Brownlee explained that this strategy is a very powerful marketing tool. Instead of dealing with several suppliers, clients can now use FLSmidth as single source for their mining equipment. He says having one company responsible for the whole project ensures a smooth interface of equipment and limits the possibility something going wrong.
“That is the FLSmidth model, and the mandate that we work towards – a complete capability,” says Brownlee. “We can supply everything.”
But there are challenges to building mining equipment for countries with varying and foreign mining codes. More often than not, the codes differ from Canada, and Brownlee says that the topic of codes is an issue the company must be cautious of and prepare for when considering equipment design.
“In places like Mongolia, underground mining is not something they have a big history in. So there are some requirements in the code that might seem unnecessary or awkward. In some places, the code is lacking and quite often there is discussion up front on whether they will accept a Canadian code or whether they want to use the South African code or the American code.”
Because the company is committed to supporting mines when and where it is needed with warehousing, workshop and training facilities, FLSmidth has introduced what it calls the “Supercentre,” which the company website describes as a “partnership with customers and with the local community.”
Supercentres are located close to mining and cement operations, and provide localized services to ensure timely delivery and support. Each Supercentre houses world class personnel to assist with customers’ specific requirements. Some key locations are found in Mongolia, Peru, South Africa, and new locations being presently built in Perth and Brisbane, Australia, in Mexico, and Arizona.
Despite the global economic instability, in 2011 FLSmidth recorded stout market results in cement and record results for minerals. According to a company publication, it attributes this success to its new strategy of being a full-service provider focused on its six target industries – cement, coal, iron ore, copper and gold, and fertilizers. The full-service approach rests on three strong pillars: customer intimacy, product leadership and operational excellence. This approach is designed to keep the company on track and profitable for years to come.